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  CSPAN    Tonight From Washington    News/Business. News.  

    July 25, 2011
    8:30 - 11:00pm EDT  

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5 billion to 11 million of the amount of revenue that could be collected if sales taxes or apply on-line. does your organization have an estimate of how much the shortfall is and how you think it impacts retailers and states where they are at a disadvantage? >> our estimate for 2012 is $23 billion of lost revenue from the collections from both outlines ingalls, catalog sales, 1-800-sales, television, in our world all of those things are equal, smaller compared to what the internet is becoming the theory part of the big package. we think that estimate was given in 2009 and the authors of the estimate think that its low, and we are very concerned that it's going to be much higher than
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that and we will continue to get much higher than that. and obviously the collection the states and governments that rely on the revenue, but those folks in those little towns across the country that are trying to make a living selling to the people in their community that have an automatic six to 8% price disadvantage simply because the truck is driving out hundred and of packages is having a devastating effect on small and medium-size retailers. i get we too many telephone calls from the country that are in their view being killed by that price differential. >> he raises the point some of the leading proponents of applying the sales tax online or wal-mart and target national retailers who have also been blamed by small retailers for
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price pressures and that sort of thing. how would you respond to that? >> they are major proponents of this, but they are not alone. i spend a lot of time talking to the after market auto parts industry which i didn't realize was having such a difficult time but they are getting killed by the warehouses to the folks who like to buy car parts, and this isn't just a mean streak verses -- because all these internet companies are on main street somewhere and what happens when we get to the point devotees internet aren't we all main street and in the same position where the internet means retreating or in the downtown sioux falls south dakota is competing with the retailer in utah with all that price differential and putting his to steal each other's customers and
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in our view this isn't necessarily mean street, this is retailing and at some point in this process we all have to compete about the government giving a competitive edge advantage over another. >> use it to use all the says' state sales tax could wait. can you expand? >> there is concern among my employers that as you imply, the three of us change how we shop that we will find ourselves in the situation that the seals are on the internet. i met with a state senator of misery this last winter who couldn't understand why we wanted to fix this problem given that in 20 years there wouldn't be any major stores and i was actually a little bit to get that because i couldn't think of a response to that and i can always think of a response. but it made me think will, what
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if there is a mean streak in the sense we see main street today, and you can't walk into a store and buy something. you can go online to that store that's around the corner and buy something and have it shipped to you. but at that point in time, all of us will be doing so much of our shopping online that there isn't anybody collecting sales tax. but then we still of the same situation where i am shopping around online and the rest of the world doesn't. 50% of all the computers in the country are sold online. 30% of all electronic consumer electronics are sold online. if you are in circuit city, they are gone. some of the others in that business or big supporters of what we are trying to accomplish because they're scared to death they will be the next to go and the retailing will be a thing of the past which might be good for small-town retailers, but it's
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>> i'm not sure if it is good for the retailers. >> mr. peters and this is getting attention in congress. senator durbin, senator ensign are working on a draft bill come amine st fairness sect. what would you like to see the congress do? >> we would like to see the congress about a mean streak fairness act as senator enzi has been working on for ten years now, which gives the states the authority to require the retailers to cut the sales tax if those states have done the minimum simplification of the local governments and businesses have looked the ten years trying and to establish. the states have made the effort to make attacks better the right to enforce their sales tax because that is what this is about. it isn't about making somebody collect, this is about getting the tax and forced. >> last question. >> in your view is legislation necessary?
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mr. byrne brought the argument congress is the body given authority to regulate interstate commerce. could this be done without an additional legislation or is the bolack center in san and durbin's mr.? >> that is a never-ending debate among our group. our preference would be legislation because that's a negotiated settlement. if you go back to the court and get the wrong set of facts, we could all end up with a situation where an odd group of people have to collect, and our preference would be dead everybody above a certain small-business exemption would collect and they would follow the same rules and every state would have to do something to make the tax system better. >> scott peterson is the director of the streamlined sales-tax governing board which represents states in their effort to get sales tax collected by internet companies gautham nagesh as with the hill
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if you'd like to read what he writes, thehill.com click on hillicon valley. thank you for being on the communicators.
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president obama will address the nation tonight about the ongoing debt negotiation she is joined by the new york senator charles schumer.
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>> senator durbin, and we had to do this because a moment of silence they are not here but they are on their way. >> i spent all weekend trying to work something out with republicans, but instead of pushing forward, we went backwards. here is one example. you know, we are spending this year for the military about $700 billion. that is more money for the military than all of the rest of the country stood together. so you'd think in this the date that we have, that the pentagon could chip in a few bucks and cut some spending. secretary gates believes they
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can. this week, i'm sorry, this weekend the republicans wanted to raise spending for the pentagon. in the matter that we have on the floor there's cut depending on the next ten years something the pentagon can live with, but over the weekend, low and behold they want more money for the pentagon. so, rather than try to work on something as obvious as this, they went the wrong direction. what they are trying to do is establish the same debate, the exact same subject a few months from now. republicans short term plan is a starter in the senate and the white house. and certainly the democrats in the house agree wholeheartedly with us. a short-term agreement which the
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same dire consequences that would be triggered by the default itself as one market analyst said today, quote, there's a significant risk of a downgrade with an agreement that ties further cuts to another vote only a few months down the road. it appears to me that the republicans are more interested in trying to embarrass the president than doing what is right for the country. so today we will bring to the floor a reduction package and break the impasse and put to rest of the country at ease with the specter of this default. this proposal satisfies the core principle by protecting medicare, medicaid and social security. and providing the long-term extension of the debt ceiling that the market we are looking for to read the bill also means
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republicans' demands to the major demands that convey know if revenue and the amount of the kutz meets the amount of the debt ceiling increase. they want and that is what we give them. so now all the republicans have to do is say yes. unfortunately, the republicans who used to run the congress on the republican caucuses are being driven by the radical right wing that is so in tune with the tea party. they want their leaders, the american people as they are doing, they want their leaders to ignore the business leaders like the chamber of commerce that they are ignoring coming and even a majority of republicans around this country want something to happen and they are refusing to do that. they would rather cut social security benefits and and the taxpayer funding giveaways for these billionaires' and of millionaires who have the
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corporate jets. we shouldn't let these extremists dictate this debate or the direction of the country. the time -- i am sorry, the time for ideological extremism should end. now's the time for cooperation and consensus building and that is what the legislation is about, the art of compromise and break away from the extremists running the republican party here in washington. >> thank you, senator reid for your leadership on this issue. it is unfortunate that the negotiations over the weekend or not able to produce an agreement despite the president's warning that he would veto any short term plan. speaker boehner has refused to budge from his proposal. he is even going ahead with a vote in the house on this plan, though he knows it cannot become law. this is a dangerous waste of time given that there are so few
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days between now and the deadline. i make no mistake about it. the two-step plan outlined by speaker boehner is a dodge. it kicks the can down the road. it results the debt ceiling only for the next few months. and after that, we would be right back at square one all over again. as senator reid said yesterday, he can dress up his play in any way that he wants to read it is simply a one step short term plan. look how difficult the crisis has been to result after a year of negotiations. does anyone think it would be a good idea to do this all over again in six months? the speakers approach is not only wrong. it's dangerous. it would leave a cloud of default hanging over our head for the next several months undermining confidence in the u.s. bond markets. market analysts have rejected
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the approach saying that it could bring about some of the same consequences as the default itself. it could even cause a credit rating downgrade. christian cooper, a currency trader was quoted by bloomberg news this morning saying, quote come from the market point of view a two-stage plan is a nonstarter. there's a risk of a downgrade with a deal that ties further cuts to another vote on the few months down the road given the significant resistance to do the right thing now. also, mohammed, one of the most respected followers of the market expressed concern last night that, quote, the political ground is being prepared for a short term stop compromise and warned that this could lead the u.s. debt rating, quote, extremely exposed to a damaging
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downgrade. that isn't his words or my words or some democrats. these are the experts in the market. even republicans rejected an increase in the debt ceiling as recently as last month. if it can't cover the republican chairman of the house ways and means committee said, quote, it doesn't give you certainty. ideally you like to get that settled and not have it continually hanging over issue. a majority leader kantor said, quote, if we can't make the tough decisions now, why would we be making those tough decisions leader? i don't see how multiple votes on the debt ceiling increase can help get us where we want to go. senator reid, myself and most democrats agree with majority leader kantor on that point. republicans have apparently flip flop on this point but the short-term deal is still in on starter in the senate. while republicans continue
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pushing the plan that will never fly, the senate plan offers a real potential to finally break this impasse. thanks difficult choices and it includes 1.2 trillion in domestic discretionary programs including defense. this will have consequences for years to come to read it includes a significant savings on the mandatory side and savings from winding down the war in iraq and afghanistan. these are savings that cbo scores of about a trillion dollars, that cbo scoring them at a trillion dollars. now we know some republicans will quibble over the savings but they have no leg to stand on. though war is the second-biggest policy driver of the deficit after the bush tax cuts. if conducting the war ads to the debt, it is undeniable winding down the war deliver savings.
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the administration tells us with the wind down their putting in place in the iraq and afghanistan, they can prosecute the war on about $630 billion over the next decade. cbo, however, assumes 1.67 trillion in war funding for 2021. by adopting the administration's lower number, we can save over a trillion. we know the republicans agree with this because they included the exact same savings in the wrong and budget that passed the house. i never criticized such accounting then and it's hard to see how they could do so now. last, senator reid's proposal allows a joint committee that has the potential to achieve even deeper savings from the road. , this is an offer that republicans cannot refuse. all of the cuts in senator
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reid's proposal have been supported at one point or another by republicans. if they refuse this offer, it simply means they want a redefault for whatever reason. as senator reid said, it meets the requirements that the lead out dollar for dollar savings in the debt ceiling increase, no revenue and cuts that they have supported. so, ask yourself. the american people will be asking themselves if they oppose this, why? since it is everything they asked for. in the speech at the new york economic club, speaker boehner leave out the two main criteria. the amount of the increase must be matched by the amount of spending cuts, our proposal cuts even more and speaker boehner said the tax increases must be off the table did well in our proposal includes no revenue whatsoever.
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this is a very hard decision for many on our side. our side knows any serious plan must include revenue but in the interest of preventing the default we can have the fight on revenues leader when we finally pursue the grand bargain that speaker boehner couldn't bring himself to accept from president obama and we offered this plan. it's a tough choice. but for democrats to get an increase in the debt ceiling for 2012 and we succeed in preventing any benefit cuts to medicare, medicaid or social security. this proposal meets both sides bottom lines. it's a good deal at this point there is no alternative other than default at no basis for republicans rejecting this proposal other than that they want a default.
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>> your staff and his staff was putting this in a legislative language over the weekend, and it all changed after you went down to the white house and the president speak to is mitch mcconnell lobbying about this or were you with him on this plan? >> of course we in the legislative branch have harsh terms as you know. we had a good negotiations over the weekend, but they could never get off of the six month deal. we could never agree to less than six months or less i could never get off that and as we
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were negotiating we were trying to come up so we could do our appropriation bills into something senator mccaul tried to do -- senator mcconnell and the staff to come up how we would and that is where they started going backwards wanting more money for the defense. so, i would say to my friend mitch mcconnell nice try but don't blame on the president. >> the two plans one in the house and one in the senate, this is a -- is there any chance now that a bipartisan deal -- >> everyone listen to what senator schumer said in detail. just about everything in their plan we have not agreed to especially the timing of it. everything in our plan is agreed to. our plan is pretty simple. a dollar for dollar savings that they said they wanted, no
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revenue, that's what they said they wanted. these are the things they supported in the past. this is no agreement of chicken. this is a game of really this is one of the most serious things we can do in our members of congress is to do something that this debt which is expiring. we're about to go over the cliff we are saying something we've agreed to. nothing we agreed to is a short term extension. president obama and we've been on the record for weeks saying we won't agree to that. >> [inaudible] >> never with conditions. we have extended short terms. 40 times, but never condition. we extend the debt has we have done in the years senator schumer and i have been in
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congress but never with conditions and they of course want to do it with lots of overburden terrible conditions. >> [inaudible] >> every republican in the house of representatives accept five voted for it. 40 republicans voted for it so it is by ceo and by omb stat how is it good in their budget and not when it's in our budget? >> the owsley in 2012, how much of a cut in 2012? >> i will get that from my staff, okay? >> you talked about movies but one of the things s&p and
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moody's has said is they want to see a long-term reduction in the trajectory of the debt to gdp ratio yet in this plan with the discretionary cuts that doesn't get to the entitlements in the long term driver. >> that's why it seems there has been acceptance all over in this capital. with my idea to have a joint committee. it's going to be in the proposal sent over to us. >> everyone should be aware the only way to reach those numbers is with revenue, and that is why every time we talk we talk about the need to do something with revenue. everyone knows that the president has said and we have said we will not touch entitlements under unless there is movement on revenue. what does that mean? taxes. people are shipping jobs overseas and these companies are getting massive subsidies and
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still making billions of dollars. it means millionaires and billionaires may not be able to get the same tax cuts they got during the bush administration. that is what we are talking about. moody's is right. we need long term. what we are talking about is getting this country out of the people in the next two years. >> the discussion through 2012 republicans say that you are playing politics and obama is trying to protect his campaign. >> we would be happy to do it longer if you're interested in doing it longer we would be happy to do it that way. now this is an mix sample of somebody that is so nice and polite. okay. [laughter] -- [inaudible] -- reach out on an alternative acceptable to both sides and what you see is that pipeline to come together. >> we are approaching did date.
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it's basically a week from tomorrow it is unfortunate the republicans have taken so much time but they have committee what obviously by the other reporters here they want to have a showdown here coming and we have been trying to work something out with them for several days now. president, as you know, worked very hard. he's spoken to boehner and mcconnell and had them to the white house and us down to the white house and every time that we seem to be making progress, they walk away hot. this isn't something that happened recently. we know the agreement was forged between senators judd gregg and kent conrad the walkout of that legislation. we know that the joe biden talks, they walked out of that with the talks in the white house, he walked out of those in effect. as a cannot take yes for an
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answer. >> can i say something? this idea that there is even handedness and the quality is just not fair. we have moved in their direction so many different times, and they don't budge. no revenues, noeth revenues. that's why you can't get a great deal. you can't get a grand deal with revenue. here we move totally in their direction. their proposal doesn't move an inch in our direction. so, that is why the american people are saying that because of defaults and the cause of gridlock are the republicans in congress, not the president or the democrats in congress because it hasn't been an even-handed when we give some they give some and this proposal was crafted by senator reid with them in mind. here is what they've asked for. and it's not welcome you have two proposals out there. that's not really fair because
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what is happening is very simple. there are 100 people in the house who don't care if we default, many of them, who are extreme and ideological in that haven't seen the house republican leadership responsibly resist that. that's the problem here. and if you think it is sort of even-steven to have a small group of extreme people drive the whole debate on the republican side and then democrats should give in, that makes no sense because it is terrible for the country. those hundred people do not represent america. everything says that. >> you should the president your plan at the white house and so did he in dorset -- >> my plan? >> this plan. >> of course. stomach is he going to come out and endorse this? >> you spoken to senator mcconnell about this or any
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other republicans like the centrist republicans, do you know if you can get the votes? >> senator mcconnell had those conversations. >> if you get 60 votes for this proposal? >> i would hope so. ..
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>> good evening. tonight i want to talk about the debate we've been having in washington over the national don't. a debate that directly affects the lives of all
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americans. for the last decade we've spent more money than we take in. in the year 2000, the ghost had a budget surplus but, instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts while two wars and expensive prescription drug program were simply added to our nation's credit card. as a result, the deficit was on track to top one trillion dollars the year i took office. to make matters worse, the recession meant that there was less money coming in and it required us to spend even more on tax cuts for middle class families to spur the economy, on unemployment insurance, on aid to states so we could prevent more teachers and firefighters and police officers from being laid off. these emergency steps also added to the deficit. now, every family knows a little credit card debt is manageable but if we stay on the current path, our
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growing debt could cost us jobs and do serious damage to the economy. more of our tax dollars will go towards paying off the interest on our loans. businesses will be less likely to open up shop and hire workers in a country that can't balance its books. interest rates could climb for everyone who borrows money. the homeowner with the mortgage, the student with a college loan. the corner store that wants to expand and, we won't have enough money to make job creating investments in things like education and infrastructure or pay for vital programs like medicare and medicaid. because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it and over the last several months that's what we've been trying to do. i won't bore you with the details of every plan or proposal but basically the debate hassentered around two different approachs. the first approach says,
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let's live within our means by making serious, historic cuts in government spending. let's cut domestic spending to the lowest level it has been since dwight eisenhower was president. let's cut defense spending at pentagon by hundreds of billions of dollars. let's cut out waste and fraud in health care programs like medicare and at the same time let's make modest adjustments so medicare is there for future generations. finally let's ask the wealthiest americans and biggest corporations to give up some of their breaks in the tax code and special deductions. this balanced approach asks everyone to give a little, without requiring anyone to sacrifice too much. it would reduce the deficit by around 4 trillion dollars and put us on a path to pay down our debt. the cuts wouldn't happen so abruptly they would be a drag on our economy or prevent us from helping small businesses and middle class families get back on
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their feet right now. this approach is also bipartisan. while many in my own party haerpt aren't happy with the painful cuts it makes enough will be willing to accept them if the burden is fairly shared. while republicans might like to see deeper cuts and no revenue at all, there are many in the senate who have said, yes, i'm willing to put politics aside and consider this approach because i care about solving the problem. and to his credit, this is the kind of approach the republican speaker of the house, john boehner, was working on with me over the last several weeks. the only reason this balanced approach isn't on its way to becoming law right now is because a significant number of republicans in congress are insisting on a different approach, a cuts only approach. an approach that doesn't ask the wealthiest americans or biggest corporations to contribute anything at all. and because nothing is asked, of those at the top of the
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income scale, such an approach would close the deficit only with more severe cuts to programs we all care about. cuts that place a greater burden on working families. so, the debate right now isn't about whether we need to make tough choices. democrats and republicans agree on the amount of deficit reduction we need. the debate is about how it should be done. most americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her medicare before we ask a corporate jet owner or the oil companies to give up tax breaks that other companies don't get. how can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? how can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for?
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that's not right. it's not fair. we all want a government that lives within its means but there are still things we need to pay for as a country. things like new roads and bridges, weather satellites, and food inspection. services to veterans, and medical research. and keep in mind that under a balanced approach the 98% of the americans who make under $250,000 would see no tax increases at all. none. in fact i want to extend the payroll tax cut for working families. what we're talking about under a balanced approach is asking americans whose incomes have gone up the most over the last decade, millionaires and billionaires, to share in the sacrifice everyone else has to make. and i think these patriotic americans are willing to pitch in. in fact over the last few decades they have pitched in every time we passed a bipartisan deal to reduce the deficit.
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the first time a deal was passed, a predecessor of mine made the case for a balanced approach by saying this. would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates and higher unemployment? and i think i know your answer. those words were spoken by ronald reagan. but today many republicans in the house refuse to consider this kind of balanced approach. an approach that was pursued not only by president reagan but by the first president bush, by president clinton, by myself, and by many democrats and republicans in the united states senate. so, we're left with a stalemate. now what makes today's stalemate so dangerous is that it has been tied to something known as the debt ceiling. a term that most people outside of washington have
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probably never heard of before. understand, raising the debt ceiling does not allow congress to spend more money. it simply gives our country the ability to pay the bills that congress has already racked up. in the past raising the debt ceiling was routine. since the 1950s congress has always passed it and every president has signed it. president reagan did it 18 times. george w. bush did it seven-times. and we have to do it by next tuesday, august 2nd, or else we won't be able to pay all of our bills. unfortunately for the past several weeks republican house members have essentially said, that the only way they will vote to prevent america's first-ever default is if the rest of us agree to their deep spending cuts only approach. if that happens, and we default, we would not have enough money to pay all of our bills, bills that
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include monthly social security checks, veterans benefits, and the government contracts we've signed with thousands of businesses. for the first time in history, our country's aaa credit rating would be downgraded, leaving investors around the world to wonder, whether the united states is still a good bet. interest rates would skyrocket on credit cards, on mortgages, and on car loans. which amounts to a huge tax hike on the american people. we would risk sparking a deep economic crisis. this one caused almost entirely by washington. so defaulting on our obligations is a reckless and irresponsible outcome to this debate and republican leaders say they agree we must avoid default but the new approach that speaker boehner unveiled today, which would temporarily extend the debt ceiling next change for spending cuts would force us to once again face the threat of default
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just six months from now. in other words, it doesn't solve the problem. first of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and higher interest rates that all americans would have to pay as a result. we know what we have to do to reduce our deficits. there is no point in putting the economy at risk by kicking the can further down the road. but there's a an even greater danger to this approach. based on what we've seen these past few weeks we know what to expect six months from now. the house of representatives will once again refuse to prevent default unless the rest of us accept their cuts-only approach. again they will refuse to ask the wealthiest americans to give up their tax cuts or deductions. again, they will demand harsh cuts to programs like medicare, and once again, the economy will be held captive unless they get their way.
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this is no way to run the greatest country on earth. it's a dangerous game that we have never played before and we can't afford to play it now. not when the jobs and livelihood of so many families are at stake. we can't allow the american people to become collateral damage to washington's political warfare. and congress now has one week left to act and there is still a path forward. the senate has introduced a plan to avoid default which make as down payment on a deficit reduction and insures we don't have to go through this again in six months. i think that is a much better approach although, serious deficit reduction would still require us to tackle the tough challenges of entitlement and tax reform. either way, i've told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both houses of congress and a compromise that i can sign.
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i'm confident we can reach this compromise. despite our disagreements republican leaders and i have found common ground before and i believe that enough members of both parties will ultimately put politics aside and help us make progress. now i realize that a lot of the new members of congress and i don't see eye-to-eye on many issues. but we were each elected by some of the same americans for some of the same reasons. yes, many want government to start living within its means and many are fed up with a system in which the deck seems stacked against middle class americans in favor of the wealthiest few. but do you know what people are fed up with most of all? they're fed up with a town where compromise has become a dirty word. they work all day long. many of them scraping by just to put food on the table, and when these americans come home at night,
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bone-tired and turn on the news, all they see is the same partisan three-ring circus here in washington. they see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary americans. they're offended by that and they should be. the american people may have voted for divided government but they didn't vote for a dysfunctional government. so i'm asking you all to make your voice heard. if you want a balanced approach to reducing the deficit, let your member of congress know. if you believe we can solve this problem through compromise, send that message. america after all has always been a grand experiment in compromise. as a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test time and again the proposition at the heart of our founding. that out of many we are one.
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we've engaged in fierce and passionate debates about the issues of the day but from slavery to war, from civil liberties to questions of economic justice we have tried to live by the words that jefferson once wrote. every man can not have his way in all things. without this mutual disposition, we are disjointed individuals but not a society. history is scattered with stories of those who held fast to rigid ideologies and refused to listen to those who disagreed but those are not the americans we remember. we remember the americans who put country above self and set personal grievances aside for the greater good. we remember the americans who held this country together during its most difficult hours, who put aside pride and party to form a more perfect union. that's who we remember.
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that's who we need to be right now. the entire world is watching. so let's seize this moment to show why the united states of america is still the greatest nation on earth. not just because we can still keep our word and meet our obligations but because we can still come together as one nation. thank you, god bless you and may god bless the united states of america. >> we'll stay with us here on c-span2 in a couple of minutes we'll hear from the speaker of the house, john boehner of ohio. and then after that, your phone calls on the federal debt limit and all the action this week in washington. new bills are being introduced in the house and the senate.
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we'll see debate later this week. of course that august 2nd deadline is looming. it's getting closer and closer. the numbers to call, a bit later right after the speaker, 202-585-3885 if you're a democrat. 585-3886 if you are a republican. and independents 202-585-38887. we look forward to your calls following the speaker. he will be up just momentarily. if you don't get in tonight you will get another chance tomorrow to call in at "washington journal." we're up at 7:00 eastern time. our guests include congressman dan burton, republican from indiana, a member of the foreign affairs committee. also jan schakowsky, chief deputy whip from the democrat side from illinois. she will be followed by bradford fitch, ceo of congressional management foundation. "washington journal" starts at 7:00 tomorrow and every
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day over on c-span. you can watch the president again and the speaker again. also over on c-span a little bit later tonight. in the meantime a couple of quick headlines on all of this. from "the hill", reid unveils $2.7 trillion plan and dare gop to vote against it. senator reid the put out a tweet short while ago, my proposal, my 2.7 trillion proposal satisfies democratic requests and meeting what republicans want. all our need to do is say, yes. at "the hill", boehner calls reid plan gimmicky. two of the many headlines out there. we'll get to more later and your calls. now we'll wait for speaker boehner to speak. >> i'm john boehner. i serve as speaker of the whole house, of the members of both parties that you elect. these are difficult times in the life of our nation. millions are looking for work and have been for some time. the spending binge going on in washington is a big part of the reason why.
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before i served in congress i ran a small business in ohio. i was amazed how different washington, d.c. operated than every other business in america. most american businesses make the hard choices to pay their bills, live within their means, in washington, more spending and more debt is business as usual. i've got news for washington. those days are over. president obama came to congress in january and requested business as usual. he had another routine increase in the national debt, but we in the house said, not so fast. here was a president asking for the largest debt increase in american history on the heels of the largest spending binge in american history. and here's what we got for that massive spending binge. a new health care bill that most americans never asked for. a stimulus bill that is more effective in producing material for late-night comedians than it was in producing jobs. and a national debt that has gotten so out of hand it sparked a crisis without
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precedent in my lifetime or yours. the united states can not default on its debt obligations. the jobs and savings of too many americans are at stake. we told the president january was this. that the american people will not accept an increase in the debt limit without significant spending cuts and reforms. and over the last six months we've done our best to convince the president to partner with us to do something dramatic to change the fiscal trajectory of our country, something that will boost confidence in our economy, renew a measure of faith in our government and help small businesses get back on track. last week the house passed such a plan and with bipartisan support. it's called the cut, cap and balance act t cuts and caps government spending and paves the way for a balanced budget amendment to the constitution which we believe is the best way to stop washington from spending money that it doesn't have. before we even passed the bill in the house, the president said he would veto
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it. i want you to know i made a sincere effort to work with the president to identify a path forward that would implement the principles of "cut, cap, and balance" in a man they're could secure bipartisan support and be signed into law. and i'll tell you i gave it my all. unfortunately the president would not take yes for an answer. even when we thought we might be close on an agreement, the president's demands changed. the president has often said we need a balanced approach which in washington means, we spend more, and you pay more. having run a small business, i know those tax increases will destroy jobs. the president is adamant that we can not make fundamental changes to our entitlement programs. as a father of two daughters i know these programs won't be there for them and their kids unless significant action is taken now. and the sad truth that the president wanted a blank check six months ago and he wants a blank check today. this is just not going to happen. you see there is no
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stalemate here in congress. the house passed a bill to raise the debt limit with bipartisan support. this week, while the senate is struggling to pass a bill filled with phony accounting and washington gimmicks, we're going to pass another bill, one that was developed with the support of the bipartisan leadership of the u.s. senate. obviously i expect that bill can and will pass the senate and be sent to the president for his signature. if the president signs it, the crisis atmosphere he has created will simply disappear. the debt limit will be raised. spending will be cut by more than one trillion dollars, and a serious bipartisan committee of the congress will begin the hard but necessary work of dealing with the tough challenges our nation faces. the individuals doing this work will not be outsiders but elected representatives of the people doing the job they were elected to do as outlined in the constitution. those decisions should be made based on how they're going to affect people struggling to get a job. not how they will affect
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some politician's chances of getting reelected. this debate isn't about president obama and house republicans. it isn't about congress and the white house. it's about what is standing between the american people and the future we seek for ourselves, and our families. you know i always believed bigger the government, the smaller the people. right now we've got a government so big and so expensive it is sapping the drive out of our people and keeping our economy from running at full capacity. the solution to this crisis is not complicated. if you're spending more money than taking in you need to spend less of it. there is no symptom of big government more menacing than our debt. break its grip and we begin to liberate our economy and our future. we are up to the task and i hope president obama will join us in this work. god bless you and your family and god bless the united states of america.
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>> speaker john boehner there at the speaker's ceremonial office up on capitol hill. another set of dueling set of remarks by the president and the speaker. tonight you can watch both of them over on c-span a bit later this evening and watch them at our website c-span.org. we'll go to your calls. want to bring up one story from the "huffington post" about what the speaker put forward in terms of debt and deficit. tea party coalition rejects boehner proposal. the "cut, cap, and balance" coalition which boasts of hundreds of tea party groups and more than 100 gop lawmakers in its membership, citing two provisions in his proposal amount to deal breakers. call for creating a congressional commission and its inclusion of a balanced budget amendment according to the group is only for show. they're calling it a symbolic vote, this "cut, cap, and balance" coalition. first call, singer island, florida. rick, democrat, good evening. >> caller: how are you doing
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today? >> host: what did you think of the speeches and more importantly what is your answer to all this? >> caller: what is my answer to all this. oh, lord. can i give you a little background? >> host: sure. >> caller:. i'm on disability. i've had two major heart attacks. i have a defibrillator. i got $50 in my wallet and i get $5 in the bank. they don't do the deal, i know, i'm living in paradise right now. it is just lucky. it is god's blessing. you know what? compromise should be a word that these people, can i ask you a question? >> host: rick, go ahead. >> caller: what's the place where they take all the people when ever they're going to do, i hate to say it, nuclear strike? >> host: rick, let me --. >> caller: where is the place they take them all?
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warner mountain or something like that? >> host: keep going with your comment. why do you bring it up? >> i mean we ought to take all these people making all this money and we, we need to put them in a place where they're, you know, they go home on the weekends and everything like that. and they don't meet with each other like they used to. i mean, 30 years ago they all, they couldn't get home back and forth and they all met each other during dinners. >> host: we get the point, rick, from singer island, florida. deis on the republican line from california. culver city, california. hi, dee. >> caller: hi, hi, glad you let me in. i want to say the last election showed us what we all want. the american people want a balanced budget. we can't cuts. we don't want a bigger central government and the ideology of our president is not what we want. take from the rich, give to the poor. the american dream is to
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become as rich as you can. that is what everyone wants. >> host: dee, the president came out said only way to get this done is take a balanced approach to things. what does balanced mean to you? >> caller: doesn't mean a thing to me. it is what the people wants. who believes we shouldn't drill for oil and have our own oil? instead our, so the president wants it to be drilled in brazil and we should buy the oil from brazil. and instead of solar panels made in china, why aren't they made in america? it's the epa that is holding back a lot of, that cutting, we're not able to get jobs. by not letting the oil companies drill it takes away hundreds of thousands of jobs. why can't we drill for our own oil here? and that's what's really bothering me. american people --. >> host: dee thanks, from california. try the third line, one for independents. jarrod, columbia, south carolina.
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what do you make of these two speechs? what approach do you see as the best approach to all this? >> caller: i don't think that the representatives are doing their job because they're pretty much holding our economy hostage. and i agree with barack obama, man. i think that you know, take from the rich, give to the poor, man because riching are getting richer and poor are getting poorer. we need to give the working class more money. and, you know, not like the rich are going to suffer, you know. just take a little bit. get that balance that barack obama was talking about. >> host: let's hear from eric in indianapolis. democrat line. thanks for waiting, eric. go ahead. >> caller: hi. i just like to say, that in this country right now the top 400 families total assets are worth more than the bottom 155 million combined and that as an american if you think that is not, if there is not something wrong with that, then i mean, you know, i
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work hard just like everybody else out there. i think there is something wrong when 400 families have more than half of us and the other party is not even willing to raise their pennies one cent, you know. the reason we have the deficit we didn't pay for two wars. we didn't pay for the bush tax cuts and medicare part-d. so i mean, it is obvious where the debt came from. clinton gave us surplus. all that happened. i just like to, if i could close with a quote by dwight eisenhower here. he was, during his administration republican top tax rate, 93%. said that every gun that is made, every watched, every rocket signifies the debt of those hunger and not sad and who are cold and not clothed. that is the way the republican party used to be. i don't know what happened to that party but it is a sad day in america. >> host: we will do this for couple more minutes at least. eric calling there on the democrat line. couple of tweets from the republican side. we heard from harry reid before. senator jim demint,
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republican of south carolina talks about downgrade deals. quote, we've gone past the point of no return. we fully expect the u.s. will lose its aaa status. tom graves there, georgia. i agree with my friend, congressman jim jordan. washington wants a deal. america wants a solution. cut, cap and balance. long island, new york, rich, republican. you're on the air. >> caller: hi, i'd like to know when the senior citizens and medicare and medicaid recipients are also going to contribute to the solution? i don't hear anybody offering to have social security dropped just a little bit. or medicaid or medicare just a little bit. why aren't they contributing. >> host: describe a little bit. how much is the right amount to you? >> caller: how about cutting cost of living increase by 1% a year. so if, cost of living goes up 2.2%, we raise social security 1.2%.
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how about slowly reducing the medicare coverage from 80% by, let's say half a percent a year down to 75%? this way everybody contributes to the solution instead of only the wealthy. >> host: rich, are taxes and or revenues depending where you're sitting are they part of the story here? should they --. >> caller: i would like to see the foreign tax credit adjusted for corporations. i think that would bring in a lot of money. >> host: okay, rich. sarah on the line for independents from new york city. good evening. >> caller: good evening. so, you know, i just actually didn't think i was going to, be able to get rung in i just wanted to say from the perspective of young person, and am i still there? >> host: you're on the air. we're listening. >> caller: i'm a young intern and interning here on wall street.
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from my perspective it is really interesting. i first came here thinking i have a tunnel vision view what it is the u.s. government does with the financing and contributing to and for the people. and it's really to be seeing the mining of the word bipartisanship completely turned on its own head and just sitting here, you know, in my little kind of dorm room working for a lot of these big banks who i thought were, kind of the ugly beast of the whole situation and now i kind of see who, i think, to an extent it is not just the world of finance and the fact that i think society has become intensely materialistic about pursuit of money in general but, you know, the government which is supposed to remove itself from that is in fact one of the strongest players in the situation and i actually was hoping to maybe throw the question to you, you know, as, as a media person and as someone who gets to listen on more neutral basis
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especially from c-span, what do you, what do you see as this, i don't know, this whole thing plays out? and maybe what can you recommend to myself as someone calling in to say, what exactly is going on? >> host: well let me ask, sara, you're interning up in the financial area. what's your fire? >> caller: what's my fear? i think my fear is that, you know, the maintenance of society on monetary and financial level has become one of, i think kind of dangerous, pretty dangerous individualistic pursuits and i wonder that, you know, the joy that americans used to have in just having livelihood and making money not for the sake of the monetary value of it but for the sake of enjoying the day to day activity of living and pursuing interests, i fear that's going to become completely eroded. because i can tell you for a
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matter, my intern class, i'm one of very few people who doesn't have the sole pursuit of having a salary that will bring them above and beyond the regular, you know, style of living or what it is that, what it is that comfortable america life is now. so many people in my class are pretty much just here working on wall street so they can have that big six-figure salary. it is sad. a lot of them could have lot of intellectual capability and are shrouded because of not just the finance world but very much so influence the way the government acts. >> host: sara, thanks for weighing in. want to get couple other calls in before we wrap up. if you're looking for legislation, watch the senate tomorrow on this network, c-span2. they will at least be discussion if not outright debate what senator reid, the majority leader is bringing up or waiting for that to be brought down and discussed and we're looking for house action as early as wednesday, on boehner proposal. nothing is official just yet
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but that's where we are looking, to see where twhings are headed in these next couple days. and again that august 2nd deadline is looming. crescent springs, kentucky. kim is on the line. hey, kim. >> caller: hi. >> host:. kim what do you think about all this. what did you make of the speeches one or the other plan out there now more suited to you? >> caller: i agree with president obama and i think, and the republicans --. >> host: go ahead, kim. turn the sound down on the set. we'll hear you better. >> caller: turn the sound down. >> host: waiting for kim. go ahead, kim. >> caller: okay. i agree with the president and i believe the that the republicans are holding him back. i believe they have been holding him back since he became president. >> host: anything else you want to add, kim? you've been waiting awhile. >> caller: i just agree with
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him. i think if he is given a chance and the republicans will get on board with him like they should have been at the beginning that he can make a lot of changes. i mean they just keep holding him back and i don't understand why. >> host: kim, the speaker called harry reid's plan gimmicky. says it didn't touch or tackle entitlements in any significant way. what do you think about that? >> caller: i think he's wrong. >> host: all right. kim from kentucky there. al is on the line from maryland, republican. good evening, al. >> caller: good evening. thank you very much for letting me join in. >> host: sure. >> caller: yes i'm republican from bowie, maryland. the comment that stuck in my mind this evening that president obama had to say but sad but true and focus on the dysfunctional performance of the washington government. it's a, the people of this country have gone through some hard times, for some time.
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whether it is the war in iraq, afghanistan, gas prices. oil in the gulf gulf, oil crisis, food crisis and now we have the disturbance across europe on the financial stability of some countries. so now it's our turn and we're up for that same financial scrutiny. i think they're trying to tie two things into one bag when they should be addressing one at a time. the issue at hand is addressing the debt ceiling which allows us to get our house in order. it should not be entrapment where either party is using the, off the backs of the workers, leverage to drive their personal interests, trying to drive a national crisis by linking the two issues together. they are distinctly separate. go ahead and raise the debt ceiling and then get the
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work with the same initiative and energy they're applying to this effort, to resolving the cap, the capping and then the reduction that is necessary to get to the, to the end that they both agree to. but to do it off the back of the fear of people with regards to entitlements or savings, or going to work tomorrow, not knowing whether they have a secure future for themselves or their families i think is a sad ephithet for dysfunctional washington government. >> host: al, thanks for calling in tonight. last call here is conrad from rockledge, pennsylvania, on the independent line. hey there. >> caller: yeah, good evening. i'm normally a morning caller to "washington journal.". i was on about seven or eight weeks ago when you introduced the frank hodge who is in charge of the import export bank when he told me i was absolutely right about the problems that we're not being addressed.
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we have apparently, what i consider an oligopolist type government where pac money seems to speak for the votes. nothing is actually going to get done here until we get something straightened out with the chinese imports that we have coming into this country through the nafta gaat treaty. >> host: conrad, get last word here tonight. as far as the house, senate, president, everything here in washington and deadline squeezing in, what do you see happening? >> caller: well it is starting to aggravate the people, from what i can see. we've never had to face anything like this in my generation. i'm 67 years old. my mother and father saw it back in 1929 but, you know, we've never seen the government acting in this condition. and it is childish, it is absolutely childish. but the system, like i say,
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is an oligopolistic government. what is happening with the votes they're being purchased. our health care bill as somebody mentioned earlier is an absolute disaster. if you look at opensecrets.org which you introduced in your morning show and i watched it and i joined it, you'll see who makes the biggest payments and how the votes go. so, nothing's really going to owe cure in this country and straighten out until we staten out with the legislators that we elect. >> host: that was our last phone call for this evening. you can watch the president's speech and the speaker's remark as little bit later over on c-span. right here, in just a moment we'll hear from the greek deputy prime minister who is also the finance minister of that country. he is in washington this week to meet with u.s. and imf officials about his country's debt crisis. he talked about the country's financial situation at the peterson institute. runs about an hour and 15 minutes.
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just one more reminder about the "washington journal." we're up at 7:00 eastern time tomorrow on c-span as we are every day. congressman dan burton will be along. he is a republican from indiana. foreign affairs committee member. we'll talk about the debt ceiling negotiations and other issues regarding the rest of the world from his perch on foreign affairs. jan schakowsky the congresswoman from illinois will join us. democrat chief deputy whip. we'll also meet bradford fitch, deputy and ceo of congressional foundation. author of a book, citizens handbook to influencing elected officials. that is on "washington journal" tomorrow, 7:00 eastern time on c-span. now we go to the greek deputy prime minister. >> let me welcome all of you this evening to the peterson institute for national economics for a uniquely important and usual session
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with the vice president and minister of finance, of helen nick republic. the minister has been here in washington all day talking at the international monetary fund to put last parts of the current economic reform package together. he obviously comes to us after a busy week in europe last week with some very successful results that he will talk to us about. we have a lot of greek connections at the institute. our greek friend tell us that his name is translated messenger who brings good news. so we are assuming that hoping will fill that mission with us tonight. the vice president of course, assume his position as minister of finance just over a month ago, to take
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charge of the reform program, and the greek response to the economic and financial difficulties of recent times. he was previously for the two earlier years of the current government, minister of defense. in earlier governments he had served in four or five different ministerial functions, including in 2004 in charge of the athens olympics. so, we all saw much of his wonderful results at that time. he has been a professor of constitutional law at the aristotle university. and he has published widely legal textbooks, books on politics and so is widely known in intellecutal circles in greece as well. i'd also like to recognize the ambassador of greece with whom we worked to put this program together.
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and without further adieu, i would like to recognize, introduce and look forward to hearing vice president and minister venizelos. [applause] >> good evening. thank you very much for this very warm introduction. thank you very much for the invitation. it's a great honor for me me to be here in this very famous and prestigious institute. it's a great opportunity for me on behalf of the greek government to present the last events on eurozone and in my own country. ladies and gentlemen, greece is at the center of the last three years.
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this financial situation coupled with the fact that the greek crisis developed within the eurozone, within the zone with a strong currency and a very sack factory macroeconomic and fiscal performance overall. however, while eurozone's performance thus far as the public debt, the budget deficit, the trade balance, the rates and inflation and unemployment does not strong and lasting challenge, the controversy exists in particular, the eurozone has a lower fiscal deficit and a lower public debt compared to the united states. greeces, as you know maybe, represents just 3% of the eurozone's public debt and only 2.5% of the eurozone's --.
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greece, ireland and portugal combined represent only 6% of eurozone's public debt. however, the inclusion of this country's support programs introduced by the eurozone, the european union, the european central bank, and the international monetary fund has not prevented the pressure on countries such as spain with 8% of eurozone's public debt and particularly italy with 25%. i remind you that italy belongs to the g8 and has relatively low fiscal deficit and high competitivene competitiveness. indicators. on the other hand, greece ranks in the 27th position of internationally in terms of the volume of its economy with gdp which is significantly greater than that of ireland and even
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portugal. even greece's small size compared to the eurozone and the size and effective program of protection and construction was definitely easy to engineer in the beginning and the borrowing mechanism for greece was set up with bilateral loans of eurozone member-states and imf involvement. this program amounted to euro 110 billion for the period until 2013. the programs are mainly based on mechanisms of well-established immediately after the original greek program was developed. these mechanisms are european financial stability facility which corresponds to the eurozone and european financial stabilization mechanism which corresponds to the european union of 27 members. meanwhile, the eurozone, the
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e.u., formed a permanent mechanism to support member-states that could be found in a state of fiscal crisis, with a debt crisis and incapacity to borrow. this new mechanic tim -- mechanism, the new european stability mechanism will be in force july 2013 and will incorporate the participation of the private sector with provision of collective action. now eurozone member-states are in the process to ratifying this mechanism by their parcelments. the picture is simple, for almost five years the crisis of the financial system was followed by massive state intervention. this led to the aggravation of physical problems in many countries. the financial crisis became fiscal crisis. the fiscal crisis in turn causes problems in the banking system which owns
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state bonds. in greece's case, in greece's case, the crisis is more complex. it is not just excessive debt but also the excessive budget deficit and the current account deficit that reflects the bigger deficit of the greek economy and excessive size of consumption in relation to production. therefore we helped organize intervention at all levels. first of all, at the fiscal level, by reducing the deficit, securing the environment of the greek public debt and by nicing modern system and efficient administration. at the level of the real economy by drastically reducing the great economy and stopping tax evasion. at the level of the development by reducing structural changes that make greek economy competitive. this requires that a
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construction from business and trades reducing cost and structural overspending combining progress, providing administration of justice, securing stability of edge are shun, and performing a transforming greece into a investor-friendly country. this project is very ambitious. this is drastic reduction of the fiscal deficit must be achieved in just three years from a fiscal deficit of 15.5% in 2009, to prime surplus in 2012. the need for a dramatic drop in public spending and dramatic increase of state revenues is of course -- which market and are minus 3.9% in 2011 according to to the bank of greece.
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that the adjustment problem of the greek economy must move along to paths one fiscal and one for growth. because of the crisis, many contradictions have become apparent and should be addressed. historically this contradiction exists since the period of the foundation of the modern greek state back in 1827. greece's economy, society and politics collided with a difficulty picture in all three levels. history tells, history tells us that in greece the establishment of civil society and economic structures took place after the creation of the state which was inspired by the existing models of early 19th century. problematic public administration, corporate
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interests, tax evasion, as an act of resistance against state power. gray economy, as a form of flexibility and are not exclusively greek feature. but in greek's case however this picture was combined thus creating a conflicting picture for the world state and the world nation. in greece there is wealth. there is property and incomes are that are national for growth and there is big public real estate and even bigger real estate belonging to private enterprises. there are also high incomes that are little incomes that are also not taxed because they fall within the tax-free limit. and of course on the other half there are some middle income with an nall income
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between 12 and 50,000 euro who are overtaxed. over the past 20 months we have been implementing an ambitious program for adaptation of the greek economy in all sectors. there were indeed delays and problems on our own possibility and we declared and i accept these responsibility. we have to face however, the existing challenge of the markets about whether the greek public debt was indeed viable and sustainable. or whether the efforts of the greek government, the citizens and the businesses will produce fruit without radical intervention to sustain that debt. the greek fiscal debt problem, as well as the eurozone's fiscal debt problem in general is a political problem. the same applies to the united states.
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everyone eurozone is not a federal union as the united states. there is a common currency which plays a important national real but institutions of political integration similar to those in the united states do not exist in the european union and the eurozone. the european central bank can not act like the feds in the united states because the lack of a strong federal government requires the ecb to serve as the main unifying factor in the eurozone. this is achieved through a euro policy, stable prices and controlled monetary stipulation. in fact through the stability packet for the euro, the eurozone is governed by strict fiscal rules as toable levels of deficit, three% of gdp and toerable levels of debt, 60% of gdp.
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-- toerable. the political digs making in the eurozone, and u.s. president and his administration together with the u.s. cone guess. it is 17 different governments that operate within 1 different parliamentary systems and independent from 17 different national parcelments and operate with 17 different political and electoral cycles. the eurozone has strong governments that enjoy a fresh mandate while minority governments, -- governments, governments that prepare for elections in a few weeks. it is always very difficult for the governments to ask for approval by the national parcelments in order to provide assistance to other european countries like greece, portugal or ireland. taxpayers always have the same sensibilities.
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europeans visible through the single market and common currency but it is difficult to take the form of financial assistance when it comes to real money. the eurozone is always open to the participation and assistance of the imf which has vast experience and the know-how. this is very reason of my visit here to washington today. within the international and european context after spending several months of uncertainty, greece has remained now its regained its popularity through major policies. i sat in the greek parliament voting for two laws, the medium term fiscal strategy program and implementation law which increased our partners, the european commission, the european central bank and imf. an ambitious privatization
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program was also implemented. the program aims at euro's 50 billion of revenues by 2015 through a bonding that has already been established in a climate of political a tax by the markets against italy and spain -- attitudes regarding the need major initiative for the stability of the greek public debt. the stabilization of the greek financial situation is vital for greece as it is vital for eurozone's own self-protection. the eurozone has sent and a strong message of support for itself and its currency. the eurozone of july 21st was impressive division and cooperation with the private sector.
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thus public and private sector entirely the stability of the greek public debt through intervention of a large-scale. greece's borrowing needs are, our covenant and to 2020. the servicing costs of the greek public debt is the significantly reduced. servicing cost of greece's public debt for the next 30 years is stablized at below 50%. for the first five years, and until 2016 there is provision for an even lower rate that facilitates the annual budgets. the new official rate, even with efs rates of 3.5% and within a year grace period. the debt mechanism in the secondary market becomes available with initial yield of euros 26 billions which equal to 12% of the grooe
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greece's gdp. the private sector participates by in majority of 30 years, exchange greek government bonds of nominal value of euro, 135 billion, that expired in 2020 with anticipated participation on the ambitious level of 90%. this is guaranteed by the public sector provided through efsf. . .
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>> after world war ii, president truman announced the election program progress which suffered huge losses and building in the civil war. it was known as the massive plan, now we say the new european with the commission and the european finance and the european bank as well as member states. the initial amount of 20 billion is already available for greece. this is the plan we discussed
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for the u.s. government with secretary of state and here in washington with secretary of the treasury timothy geithner are that our main with this plan. the u.s. support is strong and i am sure it can take it very [inaudible] overall support provided by the u.s. is an important for greece and the international economy and the global economic governance. the support especially through the imf is vital for us but for the international stability. if i may say the support is in the rest of the united states as the power of the global economy. the previous two years as the minister of defense the u.s.
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administration with secretary dates in nato the very sensitive and crucial issues such as afghanistan, libya, the fight against piracy or the national terrorism and the last five weeks for finance i find myself in debt, deficit and economic growth. to see the positive u.s. attitude. july 21st and the actors participation of the private sector involvement in the public debt or giving in the momentum for this. and in a climate of the
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political we see the greek inside and outside greece and i am referring to the diaspora and the community which is the largest in the world. together we will succeed in the building of the country restoring its siskel independence and the competitive service in the international market. we can't do this. the challenge for the prime minister, the government and me personally as minister for finance, but by and large it is a challenge for the greek people, proud people with many skills to honor the nation's long history. thank you very much. [applause]
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>> thank you for the very helpful and illuminating his remark coming and we also thank you for being willing to answer some questions for me, my colleague and the audience. they will be very interested to ask you for some further elaboration on the points you make. i would also like to introduce to with your colleagues that are joining on the platform. mr. george, the chairman of the council of economic advisers of
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the government and the general director of the public debt management office. >> [inaudible] [laughter] >> he will get many questions, i'm sure. mr. minister, let me start off by asking you a bit about the domestic politics of this issue increase. you have outlined the very ambitious adjustment program, the reform program your government has adopted. you have now agreed with your european colleagues and i presume with the international monetary fund to carry out that program. we are all aware. we read the newspapers and watch television and we have noticed that there has not always been unanimous support for your program at home.
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as a talk about the domestic politics. how will you be able to ensure effective implementation of the program? do you anticipate there will be widespread support now that the package has been put together in brussels last week, give your assessment of how it is going to play out and athens and throughout the country. >> thank you very much for this opportunity. as you know very well, the main difference between greece on the traditional loveless that in his crease we have a traditional system of governance with the frame of a european continental parliamentary system between the government, government will majority in parliament and the
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position first of all the so-called major opposition, the main party of the opposition and always very controversial in this vital for the existence of the opposition. during a conventional period, we are ready to accept the practice , but a period of historical and existential crisis is absolutely necessary both for the government and for the position to organize a common national platform for the reconstruction of the states, of the civil society, of the national economy and also the
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name. here as you can see i am the representative not only of the greek government and the ruling party, but also of a greek political system, and here also as a representative of the opposition, and i speak before us not only on behalf of my friends but also of my friends of the new democracy and the parties of the opposition. we have some very important and very constructive concerns. for example, during the last main voting in the parliament about the privatization program, the majority was very -- a majority of the fed, and this message, the message of the
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responsibility of the cooperation was very fruitful for our work and negotiation. during this last time in brussels and also for the construction and the approval of the new program and the problems of social cohesion we have problems with the public opinion it's difficult to implement a program sacrifice and come to revenue. it's very difficult to reduce tensions. it's very difficult to organize the new opportunity for the country through a huge unemployment. it's very difficult to present a new national narration before the younger generation and
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because of that the nationals doing this. increase we talk very often about the unity, national unity is the political consensus, and about social cohesion. social cohesion is the necessary sensitivity for the implementation of the perspective with hope for the future. this is something very, very important i don't believe in the early in the approach of the history, but we must reestablish the hope and expect for a new generation. this is absolutely necessary and in national matter a message for the government and a message from. and this meeting thanks to you
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is a great opportunity for me and the great nation to send this very clear message from and this is a message of commitment because without this political commitment, without the delivery, without the strong and systematic implementation of the program it's not possible for us , and also to present the necessary support from the international community the delivery of the program if that
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might possibly be privatized much more in fact than your programs have included so far. so, looking for optimistic possibilities is this an area where you might over perform, where you might be able to raise more revenue than achieve more success? >> this is my personal target. [laughter] tells us about that. how do you see the privatization, the timing, what elements would be in the forefront of that effort? >> it is first of all the program of structural change. the greek state with the greek
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public sector is a traditional one with unacceptable dimensions according to the modern organization of the state and the public sector. the program of the privatization of the public entities of the so-called general government sector is a program of structural changes because we need them more clever, more factional and less expensive states. this program of privatization as a program of structural changes is vital for the budget and absolutely vital in other parts of the main fiscal target for the primary surplus the next
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year. but we have also the commitment and the obligation in the program for the financial needs of the country during the supper go in 2014 and in july, 2014. because the new program has three main pillars. the first is the new official support in the year goes on and parts from imf and the private sector involvement. the third pillar is our own contribution through privatization. we need an amount of 28 billion euros by july, 2014. for financial reasons but also
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structural reasons >> we have also a second stage, additional amount of 22 billion year rose to the two -- euors until 2015. the second stage is also very important for financing the new debt. this new mechanism under the auspices of the esf is an important mechanism because we need to cut the nominal burden of our public debt and it's also very fractional. i can make the distinction between privatization of the entities of the so-called public companies or of public rights
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and to the privatization. because the property of the state. we have estimations and a very big real-estate property of private entities and this field of the real estate is important for the foreign investors increased, the accommodation with our main sectors of the economy and tourism but also for energy and the program is a very
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attractive and also we organize new fields, we can prepare new offers. we have -- we take the role because in order to construct a new market is absolutely necessary to organize these relationships, and because of that this occasion is a very important for me to meet this public announcement before the american audience of high quality because we need not only the support of our european partners but also the support from the united states and first of all the support of the great american people in d.c. and in the united states. so all of those who would like to buy a can, to the front.
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we at the institute will last only for 10% finders fee as part of the arrangement. let me ask one more question and then open up. the european summit last week we thought made a major shift because up to that point the focus seemed to be almost totally on austerity on trying to bring austere policies into place. but last week the summit talked about a comprehensive strategy for growth and investment increased trying to encourage some of the things you said in your remarks about getting a the economy growing again. elaborate a bit on that. how soon do you realistically see a prospect for resuming a positive growth, and with the kind of pro competitive steps you are trying to take. what might be a reasonable growth rate to expect for greece
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over the coming five years or so? >> as you know it is a better name for the financial reconstruction and also the competitiveness of our state and national economy. but for the discussion i can use the term austerity. it is a precondition for our final target to achieve our financial independence and also to reestablish the front name of greece. without a sustainable public debt it's not possible to implement a program of austerity or of reconstruction and competitiveness with the results and perspectives. we need a sustainable public debt in order to present the
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sacrifices of the greek people and also the national economy. and for now we have a very important and fairly constructive common understanding with our partners with the european commission and the imf about the needy and the priority to make it sustainable. and now we have new instruments, new measures for the sustainability of public debt this is the condition for the successful implementation of the problem. on the other hand, the privatisation program for the changes and a very important
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so-called fund for this new mechanism, and also for the necessary breakthrough because without the new elements and instruments it is impossible to make organized this breakthrough let me ask my colleague jake if he has a follow-up question and open up to the floor. i guess just following up on fred's question regarding the prospect of growth, you mentioned the marshall plan and perhaps as much as 20 billion available from the european commission structural funds and the investment, european investment banks with very limited if any in fact domestic coal financing requirements so i was wondering if you can be more specific about how you are going
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to make this money go to work, what is the sector that you envision actually where you could have the maximum growth enhancing impact of 20 billy and as you mentioned of the 20 billion euros is it solar energy, infrastructure investment but are some of the sectors where we can expect the government to try to put these moneys to work to kickstart growth. >> i have two points. the first point is the new elements of the public discussion within the european union about the so-called european plan and the new rules of the european union especially for greece. we can use the european plans without national contribution for the first period for the next five years this is very important for the budget and the
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real economy this is the main element. the possibility to use european plans with a greek national contribution this is the main change this is about the main sector. it's always the different infrastructure because we have now some deficits on infrastructures it is without a doubt energy. beaufort, tourism, and of course, we have the for us the great challenge for the real-estate. >> we have to standing microphones and the troubling
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microphone and please come identify yourself and then fire away. >> thank you for taking the time to come here. by your own estimates the debt swap would reduce the debt to gdp ratio about ten to 12 percentage points. with that system devotee were sorry, debt to gdp ratio is supposed peek at the 172%, 12 percentage points would make it 160 i'm wondering how is it still is the symbol? and then wondering if you can get time on the bombs what agreement and did you officially ask the imf for the second loan today? >> i will start with your first question. this 12 per cent by back is the first contribution through the
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program. it's not the independent polar of this program, but the additional result for the implementation of this program. and this is just the first step. the most important point is the creation of such a mechanism and under the auspices with the necessary financial enhancement we can use other capitals for more issues this is our target now. the 12% is not the final result of the operation, but the first step, the first proof about the possibility to organize this operation in the secondary market.
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with also some other very important backers. we have the possibility to use the revenue from the second class of the privatisation program, 22 billion after 2014. this is my first answer and first reaction. >> because now if i may, the first point for us is to implement the new program to organize as soon as possible the psi now under the greek ownership for the organization of the procedure. we have the one procedure in
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cooperation with our european partners and cooperation with imf and with iaf and of the coordinators and legal and financial advisor is we are ready to start as soon as possible because we must clarify the situation and we must implement. this is innovation, and because of that, we must cooperate with all because without the mobilization of the community, and with the goodwill of everybody it's impossible. this is our first obligation. the second target is to implement our own program through the domestic political life in greece.
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and just after we had come prepared the second come third, and the other steps. we must going ahead. we must go ahead on the fast track and because of that, i insist in the keyword implementation, delivery, and also readiness to implement this new scheme because now we have a new momentum and we must explore this moment. i have the impression that the professor have the necessary experience to give the answer for the next question about the banking balance.?
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>> [inaudible] >> as you said, they are going? to start from the debt level of 107%. the distinction between the gross debt is important for the liability and a system of the o? the debthññ????prñññ÷
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the changes below cover theññ remaining 11% is lower interest rates. so, the private-sector will continue with somewhat lower interest rates for example theu next four or five years i think is going to be around 4%. this is the agreement with the private sector. the most important thing however that has to do with debtñ servicing and the interest-rate that mobility has to do with interest rates of the sector we have a little more than 100 billion now. a little more than 100 billion which a little uncertainty which
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will be given at a rate of 8.5%. then we have another from lastç year's program which will be at 30.5%. as we are thinking at least 40% of the debt will have an interest rate of 3.5%. we are thinking about greece. >> this is -- >> for example the had already borrowed 50 billion which is not the lower interest rate but may, later. if this comes in and we are talking about 6% of the greek and debt at 5.5 plus the lower interest rates on the private sector. now let me go to the second variable as the primary surplus. the primary surplus would have -
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10%. at the end of this year it is going to be - .8% close to zero. this change of more than nine percentage points in two years took place in the environment of the severe recession. if you take the adjusted primary surplus, then you will see that this takes us to about 2.5%. so, in their real terms we are talking about 12.5 percentage points change in the two years. we are aiming at reaching 5.5 to 6%. we are for .3 points away. and that is only within the first to. if you look at other countries for example the u.k. has a surplus - 3.5%. a number of countries. so, we are making a lot of
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progress here. then let's take growth. now the growth is probably the most important variable. where does this come from? i think that there are at least four advantages that increase has over the average of the year autozone. the first vantage is greece has been the most regulated economy probably in the last communist country in europe. i can tell you many examplesñ about that. [laughter] >> the thing is the transportation are the same within 1971 that is 40 years you know how many years it has been increasing that to read and a number of these are liberalized now for example. so, the impact of the regulation
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in the economy is the first source over and above the year autozone. the second thing is greece is the country with their greatest state ownership in the intervention, public intervention in europe. now, by all of these assets we are introducing efficiency in the economy. and for its simple, we have the lowest labor participation in europe. i mean i think between six or seven percentage points lower than the average. and to give you a factor that i think contributes a lot. we have the largest underground economy. why this may be in a vantage? because this is a big potential poll to pull the resources in the former sector.
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>> the last question about the psi and the timeframe appreciates the operation of the monumental size has taken the time to put together very many parties involved in europe, and i think by the middle of this week there will be a press release that will cover the main structure and the body of the team that will carry out this effort. >> the imf loan request? >> sorry? >> for the loan request. >> there has not been a request. had there been a request you
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wouldn't know it now anyhow. [laughter] it's a good try. >> okay. next question. >> financial review think you for the opportunity. >> i wonder your reaction to th moody's downgrading about the default this morning i'm curiou to know in your privatization program and to greece had order at the manufacture of the submarines and a sizing of the paper and to spend a lot of money manufacturing submarines domestically when they could be on the market available so i would be curious to know ball
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offers on the submarines. thank you. >> okay. we can start with your first question. the new element is the very positive motivation of the last. the riding with a very good and hopeful the motivation because the international financial community understands very well and acceptance of the new scheme for the private sector participation and also to a huge volume of the officials program. for the period of the transition from the old program to the new, we have this problem but for the
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first time after many months, we have a positive and constructive approach for the perspective of the greek economy, and this is something very important for us because for the first time after the two years we have a positive signal from the part of the international financial community which is something very important for us. and it's not possible for me to understand very well your second point on the submarines program, but this is a story. it's of an initial choice but a huge effort to clarify on
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history and reorganize the sector in increase and the relationship is constructive and i'm in touch with my counterpart who organized the involvement of the greek private-sector in the so-called and we are waiting for a similar participation for the american private sector. this is now the new challenge and our invitation because we are here not only to make the talks with the imf or secretary geithner or the administration or the private sector because we
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found the real involvement of the american private sector is just not possible for us to implement our program to make the delivery for the privatization and to achieve our financial targets this is my invitation and commitment and a great opportunity for investments from the united states to participate in this new era for less. >> mr. minister, i think it's important indications you give up the reduction of the debt ratio, the indication about the assets we need to look at the net i think getting the story out about the debt sustainability would be very helpful because the dominant view remains the debt is unsustainable and that there will be another round of this a year from now.
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the particular question i have is a little bit difficult to see how the program isn't over financed. logically the july document had things working out the public sector was paying off amortization and private-sector. the new program has the same amount of public money coming that has tenure race so you don't have to worry about amortizing public money so it looks like there's going to be a huge reserve fund because you're going to have more money than you need. you have the right to interpret what you said you may be some of that research fund to do buybacks or in my missing something >> if you analyze the new loan of 109 billion you will see them
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there you have some deficit financing to cover and money we need to borrow to buy the great enhancement of the 35 billion. and you have 20 billion for the meeting of the capitol so the domestic financial stability fund will go from current scheme of 10 billion to 30 billion would be the 20 billion minimum of the debt buybacks so that isr >> i appreciate these numbers put together this past week with a sizable number of governments on the table and then putting down some members, so you may be up to the 3 billion up or down and it's one of these numbers, right? but what of the key thing is in a moment of crisis there are so
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many governments on the table in agreement when to them i don't understand that i know some of theirs where think the government can get the decision >> the new program is not known just a loan of more sophisticated and complicated scheme which because we have 45 billion from before the new mechanism and we need also the capitalization of the budget system in the traditional budget system like the irish banking system and finally, we need the public support to organize the
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necessary enhancements for the private sector involvement. this is a coordination between public and private sector. this is the new element in of this problem. we must now implement and because of that we have also the necessary know-how and expertise because of that we are here and we can organize better with the economic and financial community globally and after my meetings to them washington, d.c. i'm very optimistic about the
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implementation of the program and about perspectives of the efforts. >> jim? >> thank you, frontier region of the washington post. thank you for your presentation today. i want to ask you to expand on a couple remarks you said specifically but to do that i want to ask first about the general context of the european aid package. it said some countries in europe, germany is often named are actually trying to engineer a cultural change increase and make them more like the northern european countries trade the general question is that an acceptable goal? the specific points have to do with your remarks about american investors and transforming increase into an investment friendly country with the phrase you used. could you tell us what is it about greece today that is not investor friendly how you
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propose to change it and how long it will take to? >> i start with the first question because in my capacity as the professor it is easier for me to give the practical complete answer. the first problem is the instability not only about the taxation system but also about the administration's support. according to the last of our main think tanks it is about 10% of gdp. the same with the so-called
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structural overspending according to the last academic status. this overspending is about 30% in comparison with the best western country on this field. another important factor is the administration justice who need a faster and judicial system with some more flexible procedures and this is something also very important for every investor increase in the stability of the legislation and more clever and flexible
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administration and a faster justice is the preamble of our problem, and the priorities in the least of our efforts for the investment friendly country. in your first point is the result of your very systematic knowledge on greece. this pedagogical approach from the european union is obvious and as you know, greece is a country where the train oxidant, it is a country in a european union with an approach about the
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economy. we are absolutely open and ready to accept the other approaches, and the necessary flexibility and also the necessary openness, but on the other hand we need this discipline. we need this more systematic approach. and now we are ready to organize this combination to incorporate new elements and to preserve and modernize the traditional and structural element of the mentality. this is not a confrontation between two different cultures, but without a doubt, we must level from our participation in
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the european union, and also we must explore this opportunity in order to represent the country. increase is the most important country for the holidays, but also a very productive country with a very important possibilities with a potential and a potential according to the expression of the professor we must transform our structural problems. this is a very complex target because we must work on the field of the economy come on the field of our fiscal system and
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of our public administration and our civil society, on the field of the national one ~ to read this is a historical effort, but we are here in order to implement a very difficult program and in order to achieve a difficult but not enforceable mission. this is also for the acceptance of the proposal of the prime minister to appoint me as new minister of finance. after the experience of the minister of finance and now on the field of the real war, the economic war, and i am here in order to win in this war. >> on that note, mr. minister, we have reached our closing our.
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apologies to those who have had questions. we cannot go on all night but we want to thank you very much. this has been extremely helpful. we appreciate your remarks and those of your colleagues and thank you for joining us at this very intense time for you. we appreciate your candor and wish you the best success carrying forward your program and winning full cooperation from your partners around the world certainly including here in the united states and we look forward to continuing to work closely on this with you. thank you enormously for this evening. [applause] [inaudible conversations]
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next a forum on the implications of the political unrest in the arab world. hosted by the woodrow wilson international center for scholars, this is just a little more than an hour. >> [inaudible conversations] >> good afternoon. thank you all for coming. my name is mike, i'm vice president of the woodrow wilson center here subbing for the middle east program. there's a conference in athens greece on the middle east as we speak. this is a meeting which is sort of precisely what the wilson
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center does best. we bring important streamy timely and relevant. the middle east program at the center is done something like 25 meetings since january on what has been happening throughout the middle east. those sessions have included two or three on libya and many on the jet. they included business and political delegations that have come from algeria from to nisha to and from egypt. they include public talks by two female ministers. the only woman serving in the transitional parliament in tunisia who happens to have been a scholar of the woodrow wilson center six years ago writing a
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book, and so this is an ongoing set of problems we have, and we are very happy midway to come here and talk to you about it. you're going to be hearing from two senior scholars at the center. david and margo, and i guess that we like to think a little but that the fed produced a paper last year that we published entitled to egypt at the tipping point. and some feels the need to feel that helps start things rolling in the region. david will talk about eight minutes followed by margo about eight minutes and then we're going to do the most important thing which is open up for all of you. but again, welcome and thank you for coming. david? >> good afternoon. i'm going to talk to you about what you might call the counter
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revolution under way in the arab world. and look at the monarchies. there are eight monarchies in the arab world. six of them in the gulf and the persian arab gulf and then morocco and jordan. the reactions to the arab spring is what i'm looking at, and the reactions have been quite different, and i have myself just been in the last four months in morocco, tunisia, saudi arabia and bahrain. so i will talk about what i saw there and then a little bit at the end about issues of development which is the title they put out about this session. so as i said, there are eight
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arab monarchies. most of them have a lot of oil or gas wells which gives an enormous latitude about how they have reacted in or reacted and will continue to react to the so-called arab spring. morocco and jordan do not have either leal or gas wells. the authors do. and this has allowed them also even more morocco and jordan have reacted in this way to try to deal with the unrest first by increasing salary, government salaries, subsidies, keeping subsidies down, sometimes cutting the cost of staple foods, bonuses for workers, and in the case of 28 -- kuwait all food items for one year.
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saudi arabia spent about $145 billion trying to deal with economic and social problems. so that has been the general reaction. now i'm going to do the two extremes. the two most conservative reactionary monarchies if you will just happened to be the ones that are extremely important to the united states coming and that saudi year arabia and bahrain. saudi arabia is absolutely the key to stability in the oil world. and also to talk defense of the arab gulf and to the flow of oil out of the gulf. it is, in addition, purchasing 60 million farms from the united states over the next decade. so it's quite important what happens there is extremely important to not only the united states but also the entire